Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):

o

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

The Company previously constructed a photovoltaic system for Solar Tax Partners 1, LLC (STP)
located on land owned by Aerojet in Rancho Cordova, California (the Generating Facility). HEK
Partners, LLC (HEK), is the managing member of STP. As previously disclosed, Company agreed to
finance a portion of the Generating Facility in the amount of $3,630,164, which obligation was
assigned by STP to HEK. The obligation is evidenced the previously disclosed Promissory Note dated
December 22, 2009 between HEK and the Company (Note). As previously disclosed, the Generating
Facility project was accounted for using the zero profit margin method of accounting, deferring
recognition of the Note and related gross margin in the Companys financial statements until such
time as the Company received payment on the Note.

The Note was unsecured and was intended to be paid from cash distributions to HEK as a member of
STP from the operation of the Generating Facility. The original financial structure contemplated by
the tax equity investor for the transaction was not successful and the underlying assumptions
proved to be invalid. HEK was unable to pay on the current payment terms, and the Company was
negotiating with HEK to amend the terms of the Note to provide that it be paid from cash
distributions to HEK from the Generating Facility over a term not to exceed twenty (20) years.

In order to obtain accelerated cash proceeds, the Company discounted the Note and assigned its
interest to HEK pursuant to a Note Purchase and Sale Agreement dated December 22, 2010, which also
provided the Company with a release by HEK of any claims against the Company related to the
original structure and assumptions (Note Agreement). The Note Agreement provides for the
immediate payment of $1 million by HEK to the Company in consideration of the assignment of the
Note from Company to HEK and Companys agreement to pay certain future closing costs and related
payments, in connection with a loan refinancing the purchase of the Generating Facility. The
purchase price was determined based on the present value of the obligation over the likely
repayment period, the risk involved with payment over such term, and the unsecured nature of the
obligation, and the release of claims against the Company by HEK related to the finance structure
and assumptions.

The description of the Note Agreement is a summary only, does not purpose to be complete, and is
qualified in its entirety by reference to the Exhibit attached hereto.

As previously disclosed, Stephen C. Kircher, the Companys Chief Executive Officer and Chairman of
the Board, and his wife Lari K. Kircher, as Co-Trustees of the Kircher Family Irrevocable Trust
dated December 29, 2004 (Trust) is a member of HEK holding a non-controlling membership interest
and Stephen C. Kircher, individually, was appointed a non-controlling co-manager of HEK. While Mr.
Kircher and the Trust do not control HEK, they could be deemed an affiliate. Therefore the Company
elected to treat this transaction as a related party transaction and it was approved by the
independent directors of the Company.

2

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits.

Exhibit

No.

Description

10.1

Note Purchase and Sale Agreement dated December 22, 2010

3

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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